With Ethereum 2.0 just around the corner, exciting times are ahead for the second largest crypto. Ethereum 2.0 consists of several upgrades that will be implemented in the coming year. In the crypto world, upgrades like these will have a huge impact on the technology and the value of the currency. In this blog, we discuss the possible effects on the price of Ethereum that the upgrades may trigger.
Ethereum’s 2.0 upgrades
For those who don't know, Ethereum 2.0 (ETH2.0) is an upgrade to the present Ethereum. These upgrades consist of several ''smaller’’ updates that will be published during the course of 2020 to 2022 (some already have been implemented). ETH2.0 will improve the scalability, security and sustainability of Ethereum. A detailed explanation of everything about Ethereum 2.0 can be found here.
Upgrades affect the value of Ethereum
The price of Ethereum is determined by several factors. For example, Ethereum's price tends to rise and fall at the same time or just after Bitcoin has done so. But Ethereum is far from completely dependent on Bitcoin. Upcoming upgrades tend to have a positive effect on the price of ETH. Again, with the upcoming ETH2.0 (and EIP-1559 upgrade), Ethereum has been hitting a new all-time-high ($3,483). Ethereum has risen from $1950 since 17 April '21 to above three thousand dollars on 3 May '21. That is a rise of more than 60% in percent in just three weeks. There are two possible reasons for this tremendous price increase. The first reason is that Ethereum's founder Vitalik Buterin gave a presentation on Ethereum's development roadmap. This mentioned several new updates that should be published in the coming years.
The second reason for the price increase is that an Eth 2.0 upgrade is Currently in the pipelines. This upgrade will see the Ethereum blockchain switch from the current proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) consensus mechanism. This change in mechanism ensures that Ethereum miners will need to use much less energy to mine ETH. This evidently has a positive effect in the opinion of the investor, as shown by the price increase. An other example from the recent past showing that upgrades have a positive effect on the price of Ethereum is the launch of the Ethereum 2.0 Beacon Chain. According to the ETH2.0 roadmap, three major updates are planned, called "the Beacon Chain", "Shard chain" and "The docking". Of these, The Beacon Chain was released in early December 2020. As can be seen on the graph, the price skyrocketed after the launch of the upgrade. From December 1 to January 10, the price had increased by 125%. If you extend it to the next peak on 20 February, you are talking about an increase of more than 230% in just under three months.
Ethereum 2.0 price forecasts
With many large and small updates still to come, chances are that the price of Ethereum could be affected by this. Therefore, it is very interesting what crypto experts think about the effect ETH2.0 will have on the price of Ethereum.
#Ether’s 1,500% jump is just the start for the Crypto faithful. Second-largest token has scaled a series of peaks this week. Optimism is overshadowing signs the rally may be overextended. https://t.co/zdvT7rW3N0 pic.twitter.com/EddLGa6yCm— Holger Zschaepitz (@Schuldensuehner) May 4, 2021
In the graph shown below, several price predictions have been made, including the year the prediction takes place. As you can see, some of the predictions are already outdated. Such as Crispus Nyaga's ($2500) and Simon Dedich's ($3000), less than a year after making the prediction. PrevisioniBitcoin has its forecast somewhere in the middle at a price of $4740 in 2022. From this point, the price predictions are a lot higher, with Coinpedia ,Coinpriceforecast and Longforecast predicting an price over $8000 as of 2022. From this perspective, DigitalCoinPrice is still conservative with a price forecast of $9400 in the year 2028.
One prediction didn’t fit the chart, namely the price prediction of Brian Shuster. Chairman, President, and CEO of several private and public companies. Shuster predicts an average Ethereum price of $100.000,- per coin, meaning Shuster predicts a total Ethereum market cap of approximately 10 trillion dollar. Almost the current market cap of gold. Whether Shuster’s crazy prediction will come true, remains to be seen.
The above mentioned strategies are for educational purposes only. Anycoin Direct never gives financial advice. You should always do your own research before investing!